Building Brandsáthrough sophisticated online experiences and good customer service were the main themes of the eTail East Coast show this year.
Although the turnout was smaller than expected (about 800 people instead of 2,000 who have turned up at past shows), the content was informative and the sessions were well attended with retailers, manufacturers and marketers looking to learn how to improve the customer experience and the technological engagement.
“The sites that will be out there in 20 years are the ones run by people who are focused on the brand experience and on the consumer,” said Josef Mandelbaum, president/CEO at AG Interactive, in a session called “Maximizing your growth by refocusing your e-commerce programs.”
Zappos.com is one of those brands whose focus is on the customer experience. Instead of spending money on marketing, it invests the money on free overnight shipping. According to Tony Hsieh, CEO of Zappos.com, customer service is at the core of the company’s culture and leads to strong loyalty and good word-of-mouth marketing.
“Most of our growth has come from word-of-mouth marketing,” he said. “Our theory is to take the money that we would put into marketing and spend it on the customer experience.”
This customer-focused philosophy, which goes back to the pre-Internet days of retailers such as Nordstrom, seems to have worked. Zappos.com grew its business from $1.6 million in gross sales in 2000 to $600 million gross sales in 2006, and it forecasts an expected $800 million in gross sales in 2007.
Good customer service is key but so is good navigation and functionality on a site. This includes product information and good photos and the search tools that get consumers to a site.
“When a customer comes to the site, I want to make sure she can find what she wants and, surprisingly, lots of retailers are not doing that,” said Milton Pappas, executive vice president of corporate marketing and e-commerce at Redcats USA, in a session called “Exploring conversion rates in online retail.” “Regardless of how many products you have, if you can get the shopper to type in what she wants, then you can present her with relevant products.”
Searchandising allows marketers to offer more online than they can in a catalog and reach a wider audience for a lower price. However, it is important when offering a large number of products that the products be easy to find. Shelley Nandkeolyar, CEO of Norm Thompson Outfitters, finds offering 30,000 faucets to be a good value to the customer, as long as they are well organized.
“Having a deep assortment in various categories is not a bad idea if you are known for that category, but you have to make the configuration easy,” he said in a session titled “Maximizing your growth by re-focusing your e-commerce.”
The site breaks down the navigation by fabrication and price points so it’s easy to narrow down to 150 and then to 50, which still gives the customer a wealth of choices without drowning in a sea of options.
While online retailers are certainly getting more sophisticated, there are still some challenges.
Multichannel retailer Saks Fifth Avenue has enhanced its Web site with better product descriptions, dynamic color matching, multi-dimension viewing and enhanced an zoom feature to make the online experience more vivid. Still, the top challenges for this high-end products retailer is the return rate is high. But this challenge is not exclusive to the online business.
“You have to be a lot more committed to a $1,500 handbag than to a $200 handbag, which isn’t even an issue of size,” said Denise Incandela, president of Saks Direct. “When people are spending large sums of money, they have to be committed.”
Some customers bring the in-store shopping experience home, purchase multiple sizes and return the ones that don’t fit, which also leads to the high return rate.
Retailers are preparing holiday-marketing strategies. Many of the presenters at eTail are basing their strategies on last year’s metrics. ToysRus.com is going to include free-shipping offerings closer to Christmas to increase the shopping period. This strategy enhances customer service and the experience of shopping on the Web, the two big eTail themes together into one.